A new Australian solar start-up predicts that its concentrated solar photovoltaic technology (CPV) will undercut both conventional flat plate solar PV technologies and fossil fuel technologies.

The Melbourne-based RayGen Resources has raised $1.6 million in a funding round from private investors, including software entrepreneur Craig Winkler, which will allow it to match grants from the Victorian government and the Australian Solar Institute (totalling $2.75 million).

This money will be used to build a 2kW prototype and then a 200kW pilot plant – touted to be the first commercial design in the world to combine high efficiency solar cells with a low cost heliostat collector systems. It predicts that it can bring costs from CSP to $60 a megawatt hour and below.

The ASI, which is contributing $1.75 million of the $3.6 million pilot project cost, said RayGen’s C2PV technology opens up an “immediate opportunity” for a “step reduction” in the cost of large scale solar energy.

By deploying large arrays of relatively inexpensive mirrors, the ASI believes that Raygen can side-step some of the cost issues facing other solar technologies, including concentrated solar thermal (which focuses energy onto one spot so that steam can be generated to drive a turbine).

The attraction of CPV is that it can focus more energy onto highly efficient solar cells, which have an efficiency rating double that of conventional flat panel PV. It means that while cells are expensive, the small amount needed results in reduced systems costs and the long-run cost of energy (LCOE) could be around 30 per cent below that of flat panel PV by 2016, according to a report released by IMS Research last week.

The global CPV industry is said to be led by US companies Solar Junction and Amonix, and a 44MW CPV plant is about to be built in South Africa. But Australia has its own CPV technology companies which are competing for global leadership in the area, and has had numerous prototypes installed and operating in the remote areas in northern Australia. Surprisingly, CPV was not included in the recent assessment of 40 energy technologies conducted by the Bureau of Resource and Energy Economics.

Solar Systems, now owned by the listed Silex Systems, has a 600kW pilot plant operating in Victoria, has broken ground on a separate 2MW demonstration plant ? a forerunner to a 100MW plant in Mildura, and has also signed agreements to build 1MW demonstration plants in Saudi Arabia and California.

RayGen brings together two people who have played a leading role in CPV – co-founder John Lasich was also a founder of Solar Systems, while Bob Cart was the founder and former CEO and chairman of Californian CPV start-up GreenVolts.

The RayGen technology is based on a similar principle to that of Solar Systems, where the latter is using big dishes to focus the power of the sun on a receiver, RayGen proposes to use heliostats (or mirrors) to direct the sunlight. Cart says this delivers a 50 per cent reduction in the mass versus competing technologies and should give it a manufacturing cost of less than $1 a watt. He says this will translate into an LCOE of $50-$60/MWh.

“I am convinced that is the way to get cost down in solar,” Cart told RenewEconomy in an interview. “Our focus is to develop a technology that will not need a subsidy. So the choice will be, do you want coal, gas or solar” Our driving message is that for solar to be successful and broadly adopted, it needs to be on the same bar as fossil fuel.”

Cart says the company’s first target markets will be in Australia’s off-grid and mining sectors. “There is real opportunity for us to compete in regional areas and reduce the cost of diesel,” he said, noting that Lasich already had experience with this through the series of pilot plants installed in northern Australia with Solar Systems.

The company has recently moved to a factory east of Melbourne where it is working on its system prototypes. Cart says there is an opportunity for Australian manufacturing capabilities – not in the large, relatively inexpensive materials that will make up the bulk of the plant, but in the high-value solar cell modules and the management and control systems.

Cart, who was involved in the Sunshot campaign by the US Department of Energy – which aims to bring solar down to the cost of fossil fuels by the ends of the decade, says the company was going to be based in the US, but Australia was now an attractive proposition. “The opportunity for innovation and solar, the best place in the world is Australia,” he said.

The IMS report predicted that advances in CPV technology would drive down costs by 16 per cent annually, prompting an increase in installations from today’s cumulative total of around 160MW to 3GW by 2016. The authors said that with efficiency records of 34.2 per cent for commercial modules, acceptance of CPV as a utility-scale generation method is predicted to accelerate, even though its up-front costs will be higher than conventional PV.

It predicted that CPV systems are capable of achieving up to 12% lower LCOE compared to PV, but that gap could grow to 30 per cent by 2016, IMS said.

It has been widely thought that the arrival of cost-competitive rooftop solar PV systems would be the biggest game changer in the electricity market. But it may be that the emergence of affordable energy storage systems will have an even more profound impact.

There are predictions that the energy storage market is going to boom. One survey suggested that $30 billion will be spent on energy storage in the next decade in Australia alone. In the US, where $1 trillion is expected to be spent on electricity network infrastructure in the next 10 years, at least one fifth of that – or $200 billion – will be spent on energy storage.

The big question is who is going to benefit most from that investment – the customer, or the utility that delivers or sells the electricity. Or maybe even both. Most people are still trying to figure that out.

There is little doubt that there is huge interest, and likely huge demand, for the product. Given that the arrival of solar PV has enabled homeowners and small businesses to produce their own energy, it is only natural that they would want to store it.

An analysis by Energeia this year said that as a result of cost reductions in the technology, it predicted there would be 421,000 residential energy storage systems in Australian homes by 2021 – nearly half the number that currently have solar on their rooftops. The new pricing mechanisms that are being introduced into Australia – high rates for peak consumption and low rates for overnight – make it particularly attractive to have both solar, which can draw down cheap energy from the sun during the day, and energy storage – which can store excess energy and draw from the grid at low overnight rates. It effectively doubles the attraction.

Richard Turner, the CEO of Adelaide-based Zen Energy Systems, last month unveiled a new product called Freedom Powerbank, an energy storage system that will allow households to store enough electricity to cater for their average daily usage. An email sent out to 4,000 of Zen’s solar PV customers generated an enormous response – one person a minute signing up for more details, according to Turner. The response from utilities and international customers has been equally effusive, he says.

Who will benefit from an energy storage system in the home? The home-owner, the utility, or both?

Turner describes his product as a “world first,” because it uses proprietary software to capture the energy produced by solar, wind, or from the grid, and allows it to be used when the customer chooses. “We have created the most functional energy storage system at one end and at the other end broke through major cost barriers. What we developed is the first battery operating system for renewable energy systems.”

Production of the Freedom Powerbank for households begins in Adelaide in January next year. Turner says the units will cost $29,500 – offering a payback of 7-8 years, but he says the cost will fall as manufacturing techniques improve and some of it is outsourced to cheaper facilities overseas. Larger units will be available for small businesses ? who will be able to use the systems to ensure they retain their power sources through any outages – and are being tested by utilities.

Turner says the storage system is a game changer because it is clear that solar PV will be the power supply of the future, and this enables households to store that energy and utilise what is effectively “baseload” renewables.

“We have got a massive problem around peak demand,” Turner says. The proposed introduction of time-of-use pricing, along with smart meters, means that consumers will be paying as little as 7c/kWh at time, but up to 52c/kWh in peak periods. That is already occurring in Victoria.

“We saw this coming and that is what we designed this for. It will enable consumers to load shift inside their own home – they can source cheap energy from solar during the day, or draw down from the grid at night, and save it for use later.”

Turner says focusing on the software component – with Zen’s joint venture partner, the US-based Greensmith Energy Systems – was a cheaper and more effective method than trying to deliver a better battery – a pursuit that has been the ruin of several aspiring battery manufacturers as they found their technology undercut by the latest developments elsewhere.

“We went the other way, we’ve talked to the people operating the grid and looked at the functionality and created a battery operating systems with three layers of software,” he tells RenewEconomy. This covers a utility control system that can address load shifting and frequency problems, and brings the individual units together to operate as one block if needed. The second layer has rich data analytics to optimise grid function, while the third layer is an “active balancing battery management system,” that ensures optimal performance from the battery cells.

Turner says utilities are also very interested in his product ? even if they have yet to “get their head” around the issue, and how it fits in with their business models. Most accept, however, that the introduction of such systems is inevitable. “It will really challenge the retail business model,” Turner says. “But it’s going to be challenged anyway.”

He suspects some utilities will use storage systems to manage their grids, and some are already testing units in the 100kWh to 1.5MWh scale. And they will also offer such systems to their customers, but possibly not at the 20kWh scale – they will want a margin from providing as much electricity as they can, so they may offer systems with storage limits of 5kWh or 10kWh to their customers.

“People will put these systems into their home – and will be put on a contract where there is a heavy penalty to draw on power at peak times. And the utilities will have the right to pull power back into the grid when needed. Ultimately though, it is the consumer who will control the energy over the house.”

Turner says it does offer the opportunity to go off grid as well. This is particularly attractive to those dreaming of homes on rural blocks who want to look after their own energy systems. “We are going to see a trend toward modern off-grid living,” he says. His company has received 200 inquiries already for off-grid housing developments. And mining camps are also interested.

And how will the system be integrated with electric cars, and the ability of those batteries to also provide storage? Turner sent us this emailed response:

Q. Do you empty the fuel from your car into your generator at home?

A. No. Then most likely you won’t flatten your car to power your home.

He says the Zen Freedom PowerBank will be provisioned in the future for DC to DC fast charging to draw and store off-peak grid power or solar power to charge EVs quickly whenever it’s required.

Here’s a graphic display of what Turner sees as the problem for electricity grids, and the solution that energy storage systems offer.

Desertec, an organization founded in Germany three years ago in order to boost renewable energy supply through the power of Middle East and North African wind and sun energy supplies, needs to have some mini worldwide projects in order to prove the concept and increase the overall credibility of the plan, according to one key investor.

In a recent Reutersarticle, Director of Desertec, Thiemo Gropp suggested the organization have 5-10 small scale pilot projects at a cost of 10-20 billion ($12.8-25.6 billion).

“You could move a lot if this would be realized, as concrete examples are the best means to convince,” Gropp said.

The German-based project is ambitious in scope and scale. With the overall project is pegged at 400 billion ($500 billion) by 2050, Desertec plans to give Europe one fifth of its energy from wind and solar from the Mid-East and North Africa by the middle of the 21st century, enough for Germany twice over. More from Reuters:

“The project, based in Munich, aims to use mirrors to harness the sun’s rays to produce steam and drive turbines to generate electricity in the Sahara region. It wants its plants to cover an area of 6,500 square miles and produce 1,064 terrawatt hours (TWh), almost enough energy to power Germany for two years.”

However, investment money has been a challenge to attract. Recently, both Bosch and Siemens said they would leave Desertec, while criticism over costs and politics have not done any favors to attract new investors.

Despite recent concerns, Gropp thinks pressure from the public, along with supportive public policy, will give some underlying support in boosting Desertec’s potential.

“We think things will move too slowly without any political support. More can be done,” he said, adding that financial aid as well as government loans or feed-in tariffs could be used to achieve this.

In the first 10 months of 2012, the country has seen 810.20 billion kilowatt-hours of “clean energy” produced (which also includes nuclear and hydro), advancing by 26%, noted the State Electricity and Regulatory Commission (SERC).

The 810.20 billion kilowatt-hours of clean energy produced accounted for 20.4% of China?s on-grid power this year, which is up 3.6% from one year earlier.

Meanwhile, so far in 2012, China has reached a total of 56 gigawatts (GW) of wind energy generation capacity, up 7.2 GW from 2011.

What is a telling tale from China’s recent clean energy numbers comes from wind, given the emerging market country in 2008 had 12.2 GW of wind energy, and plans to install 100 GW by 2020, given previous 2009 estimates.